From the time-honored tradition of opening a savings account to the many different versions of the 52-week savings challenge, people have been very creative in building better financial habits. While there’s no one-size-fits-all money advice, practicing good financial habits can help you build a more financially stable future. If you haven’t yet gotten into the groove of being smart with your money, get started with these tips:
Live within your means
Spend only what you have. It doesn't require any complicated strategy or the newest banking technology. It rather involves good old willpower to not check out an item you don't really need, even if it's at a steep discount.
Set budget and track your expenses
Setting budget allows you to be in control of your spending habits, which is important when you have a financial goal in mind. Having a budget builds self-discipline in setting aside money for savings and reduces the likelihood of debt accumulation. Make sure you also see where your money goes using a budget tracker app or a plain Excel file. This will help you better understand how much you spend on essentials and how much goes into other items. From there, you’ll know where to cut back or ease up on your spending, so you can better control your finances.
Set a financial mantra and make sure to live by it
Find or create a slogan based on a habit you’re trying to break, and then use it as a reminder to curb your spending. It can be as loose as, “I'll only shop online if shipping is free and if I really need that item,” or as strict as, “I can only eat out once I’ve paid my credit card bill in full.” Starting this habit can help you set boundaries and avoid unnecessary expenses.
Make a list
If you’re an impulsive buyer, it’s best to list down the things you need before shopping. Also, to avoid buyer’s remorse, you can try doing these things : survey your options, do your research, and time your purchase with deals and discounts.
Look to a financial planning guide
When in doubt, refer to the so-called financial building blocks, a pyramid of financial plans you need to build from the bottom up. It’s a clear and straightforward guide to building your financial priorities and habits. It starts with the ‘wealth foundation’ block, which focuses on getting income protection, health insurance and life insurance. Once you’ve established the foundation block, you can move towards the block above it where you focus on getting an education plan if you have children. Furthermore, having insurance with investment can help you put together your retirement plan.
Practice these financial habits consistently into your daily life and you’ll be surprised at how such small changes can improve your finances.
Know you can effectively manage your finances towards achieving your goals. Talk to an AXA financial advisor today to learn more about getting insurance in the Philippines.
